DENVER (Sept. 29, 2015) – Pursuant to the terms of a Denver District Court order, James Ryan Hernbloom of Brighton, Colorado is not permitted to solicit or sell unregistered securities or act as a securities broker-dealer, sales representative, investment adviser, or investment adviser representative in the state of Colorado.

This order follows litigation filed by the Division of Securities, part of the Department of Regulatory Agencies (DORA), earlier this month. In the civil complaint, the Colorado Securities Commissioner alleged that Hernbloom had engaged in a “get-rich-quick” trading scheme involving the offer and sale of pooled foreign exchange trades. As part of the scheme, Hernbloom failed to disclose his lack of experience in the foreign exchange field, that his combined trading records showed a net loss, and also the fact that he was using investor funds for personal living expenses.

According to the Division’s complaint, in 2011 Hernbloom allegedly lured a friend into investing $30,000. Hernbloom represented that he had made a large profit on his own investments, but he failed to disclose that he was actually operating on a net loss of over $11,000. Furthermore, Hernbloom represented to the investor that his investment would remain liquid and that he would be able to withdraw it. In reality, he used the money to pay his personal bills. Additionally, the Commissioner alleged that Hernbloom failed to issue regular account statements to investors, did not provide written disclosure documents, and did not put the terms of the investments in writing.

The investor who had entrusted $30,000 to Hernbloom became aware of an issue upon requesting the return of his investment in 2012, and being told that his funds were not available. Following a complaint to the Division, Hernbloom returned the initial principle to the investor.

“For me, one of the most concerning things is that Mr. Hernbloom failed to disclose the extremely risky nature of foreign exchange trading,” stated Commissioner Rome. “These are not investments that are suited to your typical retail investor, and anyone who doesn’t provide a warning of the potential risk is not fulfilling his obligation to serve the best interests of his clients.”

Pursuant to the stipulation signed with the Division, Hernbloom neither admitted nor denied the truth of the allegations.